Bill Would Allow Formation of `Risk-Retention' Groups

Bill Would Allow Formation of `Risk-Retention' Groups

Article excerpt

WASHINGTON (AP) - Business and other groups beset by soaring
liability insurance costs could get some relief under little heralded
legislation making steady progress toward President Reagan's desk.

The measure, approved Tuesday by the House, is far more modest
than the major overhaul of the nation's product liability insurance
laws currently under debate in the Senate.

But it seems destined to prove more politically acceptable to a
Congress that has been split over liability insurance measures by
conflicting pressures from the insurance industry and trial
lawyersgroups.

The bill would enable business, governmental, professional and
other groups caught in the liability cost crunch to save money by
insuring themselves or forming groups to buy insurance.

Similar to legislation already approved by the Senate, the bill
won approval on a voice vote, with Rep. Jim Florio, D-N.J., declaring
consumers must ""never again be left with no alternative to
traditional forms of insurance.''

The measure would pre-empt state laws barring businesses and
others from forming such so-called risk-retention groups.
Differences between the bill and its Senate counterpart must now be
resolved.

The risk-retention plan amends a 1981 law that provides such
groups with a green light to band together to buy product liability
insurance or self-insure against product liability risks.

The new version would expand that authority to include all forms
of liability insurance.

In the Senate, critics of the product liability overhaul plan
sponsored by Sen. Bob Kasten, R-Wis., first sought to table, or kill,
the measure. Then, for tactical reasons, they deserted their own
cause. The tabling move fell short by the unusual margin of 96-0.

Kasten chortled afterward that the critics wanted to avoid going
on record as being against the legislation, which has broad business
support.

Actually, Sen. Ernest F. Hollings, D-S.C., took to the floor again
to denounce the product liability insurance ""crisis'' as a ""$6. …